Seagate Technology Plc (STX) on Wednesday posted a 17% drop in fiscal first-quarter earnings and disappointed investors looking for more clarity on whether it might once again go private.

The company, which missed analyst expectations by a wide margin, further clouded the picture for its future, saying it would not provide guidance or commentary for the current quarter.

"The growth margins are below what Seagate guided and below estimates," said Rajesh Ghai, an analyst with ThinkEquity LLC. "The whole over-capacity issue that plagued the industry in the last quarter has not been resolved."

The disappointing earnings report comes as Seagate, one of the world's largest hard-drive makers, mulls an approach by investors interested in taking the company private. Seagate hasn't identified any suitors, but the company has retained financial advisers Morgan Stanley (MS) and Perella Weinberg Partners LP to help it in preliminary discussions about a deal.

The Wall Street Journal on Friday reported that private-equity firms TPG Capital and Kohlberg, Kravis Roberts & Co. (KKR) are in talks to take Seagate private in a deal that could be worth $10 billion to $12 billion. It also reported that Bain Capital LLC is considering joining the talks. TPG helped Seagate go private in 2000.

In its earnings release, Scotts Valley, Calif.-based Seagate said that due to regulatory requirements it won't comment further "at this time" on its interest to go private. It also said it won't provide any guidance about the current quarter or any future fiscal periods.

For the quarter ended Oct. 1, Seagate reported a profit of $149 million, or 31 cents a share, down from $179 million, or 35 cents a share, a year earlier. Excluding write-downs and other impacts, earnings fell to 37 cents from 58 cents as revenue rose 1.3% to $2.7 billion.

Seagate missed analysts' earnings estimates of 45 cents on revenue of $2.72 billion, according to a poll by Thomson Reuters.

Seagate shares fell about 0.7% to $15.10 in after-hours trading Wednesday. Shares in the company are down more than 16% since the beginning of the year.

Seagate had a $6 billion market capitalization before it disclosed it was exploring a sale, which sent its stock up 22% on Friday. On Wednesday, its market cap neared $7.3 billion.

First-quarter gross margin fell to 20.4% from 24.5%, below the company's long-term forecast. The disk-drive business has been known for razor-thin margins and excess capacity.

Seagate shipped 49.2 million hard-disk drives, below the 50.7 million units that competitor Western Digital Corp. (WDC) did.

"Western Digital has moved ahead in market share," Ghai said, now that it has shipped more units than Seagate for the second quarter in a row.

The earnings and deal talk come during a difficult stretch for the notoriously cyclical storage industry. On Tuesday, Western Digital said fiscal first-quarter profit dropped 32% on lower margins despite increased revenue and shipments.

"Things are tough right now," said Jayson Noland, an analyst with Robert W. Baird & Co., of the market.

Conditions in the market have long been volatile, with competitors racing to introduce drives that store more data at ever-lower prices. Challenges include the rise of data-storage devices based on chips known as flash memory, which cost more but are compact and energy-efficient.

-By Jeanette Borzo, Dow Jones Newswires; 415 765 8230; jeanette.borzo@dowjones.com

(Kathy Shwiff contributed to this article.)

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